Whether an agreement had been reached between the son and the executor of the estate to transfer the farm without an exchange of contracts…

George (Eddie) Robb was one of three children of a farmer near Byron Bay in NSW. The father left his estate, which mostly comprised of the farm, to his three children. George was keen to buy the farm. The dispute about the purchase from the executor Steven Bull, was the subject of the judgment of the Supreme Court of NSW in Bull v Cooldawinda Pty Ltd [2024] NSWSC 1011 (14 August 2024).

George’s siblings supported their brother’s wish provided he met the offer of the highest bidder. Although he sold his own farm and cattle, he wasn’t able to secure the finance. George approached a Melbourne businessman, Mr Rio to join him in the purchase. Mr Rio agreed and set up a unit trust with Cooldawinda Pty Ltd as trustee.

Mr Rio decided to leave the negotiations about the purchase to George because of his close connection to the executor and his siblings.

The dispute arose with George and Mr Rio, for Cooldawinda claimed that what occurred formed an enforceable contract for the transfer of the farm without an exchange of counterpart contracts having occurred. After considering the evidence the court found that no contract had come into existence, and Mr Robb was at liberty to sell to the highest bidder.

When Mr Bull’s solicitor sent a contract to Cooldawinda’s solicitor, it stated in clear terms that there was no agreement until an exchange to contracts took place.

There was a dispute about what was said in one of the early conversations. George claimed that $4.5 mil was the price to be paid and that the family would accept this if the deposit was paid to the agent and the purchasing company identified. Mr Bull disagreed with this version of the conversation and said that he had asked for the details of the purchaser and not agreed to anything. As was the case throughout the evidence His Honour preferred the version of the executor.

Mr Rio decided that the purchaser would be a unit trust with Cooldawinda as the trustee. George was not a director of Cooldawinda. After some problems associated with the setting up of the trust the deposit was paid. George claimed that, at this point Mr Bull said that the deal had been done and that George had nothing to worry about. Mr Bull disagreed with this version of the conversation and gave evidence that he was satisfied that the company was legitimate but that expressions of interest were still being received. Again, His Honour preferred the evidence of Mr Bull.

The next problem faced by George related to the guarantee required in the contract. George offered a guarantee for the performance of the contract; this was rejected by Mr Bull because George was not a director of the company. Eventually Mr Rio signed the guarantee. However, st the same time, Mr Bull received a higher offer and told George that he intended to accept it. George and Mr Rio claimed that that there was already an agreement to sell to Cooldawinda. Mr Bull approached the court for guidance as to whether he could sell to the higher bidder. Cooldawinda countersued claiming that an agreement was in place and should be concluded.

His Honour relied on judgments of the High Court that set out the law that although the standard practice in NSW was for parties to exchange counterparts of a written contract for the sale of land the parties could agree to proceed differently. He did not accept that in this case that there was an agreement to proceed with the sale other than by the exchange of counterpart contract.

George failed in his effort to buy the family farm and was ordered to pay the costs of the executor, Mr Bull, who was free to sell to the higher bidder.